CAT tax threshold of beneficiary deceased before probate.

[Baffled]

We done our own probate on our fathers estate last year. One of our siblings died very shorty after him, but was included in the probate as a beneficiary, though she was unmarried and had no children. She died without a will. After probate our fathers estate was then divided among the remaining 2. Now we are doing our siblings probate. For the purposes of CAT thresholds from sibling to sibling, does our deceased siblings estate include the 1/3 share of our fathers estates which she would have received, or does that revert to our parent to child CAT threshold, which is well in excess of each share of our fathers estate. I ask because the split of our deceased sisters share of our fathers estate was below the sibling to sibling threshold, about 29,000, so perhaps for that reason there was no tax request, but does this mean we have mostly used up the sibling to sibling threshold, even though this was our fathers estate. I'm convinced we will have to effectively pay 33% CAT tax of that third of our fathers estate which reverted to us, as our siblings estate exceeds the small sibling to sibling threshold of 32,500. Am I correct in this?

 

[tom_12345]

Hi,
Sorry for your loss.
Best way is to give the Revenue a call & get clear clarification, they are very helpful on such genuine matters.
My own understanding is that your siblings share of your fathers estate is left to the remaining siblings, and as you stated, the threshold is 32,500 each, then 33% on the remaining.
But like I said, ask the proper experts.
BR

 

[jpd]

Your father's estate was divided into three - 1/3rd for each of you.

The part due to the sibling you then died was included in her estate. As she died intestate, her estate was divided amonsgt her two siblings. So your share is taxable at 33% after deduction of the group B threshold of € 32,500

Her share does not revert back to your father's estate

 

[T McGibney]

Best way is to give the Revenue a call & get clear clarification, they are very helpful on such genuine matters.

Do bear in mind that Revenue have no duty of care to provide correct or complete advice to the public and routinely disclaim staff advice/guidance/comments whenever it suits them, sometimes with ruinous consequences for the taxpayer(s) affected. The OP should in the first instance ask their solicitor and if necessary a professional tax advisor.

 

[Baffled]

Thanks all. Its clear that we have to treat this 1/3 as siblings estate, and not fathers. So the taxman gets 33% of that portion, or our CAT threshold for siblings estate is reduced to €3500 each, same thing. They should have blown it while alive. Thanks again.

 

[Curlywurly]

Thanks all. Its clear that we have to treat this 1/3 as siblings estate, and not fathers. So the taxman gets 33% of that portion, or our CAT threshold for siblings estate is reduced to €3500 each, same thing. They should have blown it while alive. Thanks again.

Condolences on the deaths of your father and sister.
My understanding is that As your sister survived your father she was legally entitled to inherit the 1/3 share of his estate at the date of his death regardless of whether the paperwork was finalized and the estate administered in her lifetime or not.
Therefore on her death that share due from her father’s estate then forms part of her estate -even though she may not have actually received it by the time of her death.
If any beneficiary inherits 80% or more of the CAT threshold (which applies to their relationship with the deceased person. A for parent to child / B for sibling to sibling ) they are required to complete & file an IT 38 with Revenue. See www.revenue.ie
You mention that “there was no tax request” but you should note that the onus is on the beneficiary to file the IT38 and pay the inheritance tax (if any) by the due date or they will most likely incur interest on top of the tax.